Abstract

To improve our understanding of the bright side and the dark side of political ties and determine the processes linking political ties to firm performance in emerging markets, we investigate the underlying mechanism of political ties’ effects from the perspective of dynamic capability theory and institutional theory. We posit that reduced market-focused innovation capability and strengthened legitimacy mediate the effect of political ties on firm performance. In addition, to capture the nature of the relationship between political ties and performance, we adopt a contingency perspective in our examination of the moderating roles of legal enforceability and competitive intensity. Specifically, we suggest that legal enforceability buffers the negative impact of political ties on market-focused innovation capability but mitigates the positive impact of political ties on firm legitimacy. Moreover, competitive intensity enhances the positive impact of market-focused innovation capability and firm legitimacy on firm performance. We test our hypotheses using a survey with 362 respondents in China. In conclusion, our findings provide important insights into how Chinese firms effectively utilize political ties to improve their performance.

Keywords

Political ties；Performance；Market-focused innovation capability； Legitimacy；Double-edged sword effect

本文于2019年8月在线发表于Asia Pacific Journal of Management。该期刊为学院B+类奖励期刊，张婷系汪涛教授指导的博士研究生，寿志钢教授为本文通讯作者。文章的网址链接：

https://link.springer.com/article/10.1007/s10490-019-09686-w